Chinese investors could spend millions of dollars to build two towers for a hotel and condos in downtown Tacoma if city officials are able to negotiate a development deal in the next couple of months.
The City Council gave the go-ahead to the city manager Tuesday to hammer out a contract with an investment firm with ties to China for a 300-room, four-star hotel next to the Greater Tacoma Convention and Trade Center.
Yareton Investment and Management LLC and four other firms submitted proposals to build a hotel next to the city’s convention center, on a city-owned parking lot at 17th Street and Broadway. Yareton’s proposal did not ask for a taxpayer subsidy, as three other proposals did. A fourth did not ask for a subsidy but wanted to use convention center parking for hotel guests.
The hotel tower could rise as high as 34 stories, with the upper floors containing condominiums. An adjacent residential tower could have as many as 18 floors. The project would include at least 400 parking spaces and 20,000 to 50,000 square feet of retail space.
About half of the project’s cost could be raised from Chinese investors, who would spend the money here because a federal visa program, called EB-5, could give them residency in exchange for their investment.
The United States has experienced a surge in foreign investments from China in recent years, said Martha Anderson, assistant director of the city’s economic development office. Six years ago, Chinese investors received 24 percent of the nation’s EB-5 visas. In 2012, their share increased to 80 percent.
The EB-5 program allows foreign investors who invest either $500,000 or $1 million in projects that create new jobs to earn U.S. residency for them and their family.
The city has been wooing Yareton for three years, Anderson said. Tacoma is an attractive investment opportunity, she told the council Tuesday, because it is considered the “investment frontier,” allowing EB-5 investors to do business in a nearly untapped market.
“They aren’t the last ones in on the investment,” Anderson said.
During the Tuesday council meeting, council members praised the deal.
“The fact that this is bereft of any public subsidy, this is Tacoma selling itself,” said Councilman Anders Ibsen. “(The project) gives a statement to our forward trajectory as a city.”
Councilman David Boe said the proposed 300-room hotel could allow the city’s convention center to book more events. Ideally the developer would buy – not lease – the land from the city, he said.
“It seems too good to be true,” he said, adding that he looks forward to seeing the details of the project.
The City Council could vote on the completed contract in June, said Elly Walkowiak, the city’s business development manager.
The contract would contain specific deadlines the developer would meet, Anderson said, and provide time for the developer to investigate the financial feasibility of the plan. The City Council’s endorsement is a tool to prove to Chinese investors that the project is valid, Anderson said.
Albert Sze, the project manager with Yareton, said after the meeting that he expects to attract 180 investors with at least $500,000 each within two years.
If built to 34 stories, the hotel would be the tallest building in Tacoma. Sze said he’s not necessarily aiming for that title.
“I don’t care about height,” he said. “I want it to be the best project.”
Construction on the towers could begin about a year from now, with the hotel opening in June 2017 and the adjacent tower opening in early 2018.
“We still have a lot of details to work out,” Mayor Marilyn Strickland said. “What’s great about this is it will give us more hotel rooms and it is consistent with our goals in economic development.”
Kate Martin: 253-597-8542